Skip to main content

China's exports fall by most.

 

China's exports fall by most.

China’s exports suffered the sharpest decline in almost three years in December, piling on further economic pressure as policymakers in Beijing grapple with sluggish economic growth and a nationwide outbreak of Covid-19.

Exports declined 9.9 per cent year on year in dollar terms in December, according to official data released yesterday by China’s general administration of customs, worse than November’s 8.7 per cent fall but slightly outperforming expectations of an even greater contraction. Exports to the US and EU slumped 18 and 20 per cent respectively, as rising interest rates damped appetite for Chinese goods, Goldman Sachs analysts noted, at the same time that Beijing began to dismantle its costly zero-Covid policy of lockdowns, mass testing and mandatory quarantines.
«The bottom line is that after serving as China’s growth driver in the past three years, this year external demand will be a major drag to the Chinese economy,» said Larry Hu, chief China economist at Macquarie.
Factory activity in December fell by the most since the start of the pandemic, according to official purchasing managers’ index data, though a private survey showed a less severe impact.
Hu forecast an acceleration in growth this year to 5.5 per cent, with a simultaneous drop in exports and strengthening of domestic demand.
Zhiwei Zhang, chief economist at Pinpoint Asset Management, said the weak export growth «highlights the importance of boosting domestic demand as the key driver for the economy in 2023», adding that the market «anticipates more policies to boost domestic consumption».

Labels:

Comments

  1. Felicia14 January 2023 at 17:48

    China will have serious problems with their Covid outbreak. They wasted a lot of money trying to keep things in check and they only made things worse. Not only did they waste so much money, they kept people isolated which meant many didn't face the virus until now. Dismantling measures like this will only lead to a huge number of people getting sick.

    ReplyDelete
    Replies
    1. Mona14 January 2023 at 19:45

      It would have been better to gradually ease restrictions and do this a while ago. It’s not looking good for them.

      Delete
    2. Damon14 January 2023 at 20:14

      These people are not prepared to face the virus and its mutations and many will get sick and some will even die. Too much isolation has weakened the immune system and we are looking at a new, big crisis for China.

      Delete

Post a Comment

Cloud Bookkeeping

US FED rate rise.

  The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...
Post a Comment
Read more

EU business slide.

  S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...
1 comment
Read more

Tariffs on UK electric cars.

  The European Commission has confirmed that it will continue with its plan to impose tariffs on electric cars exported between the UK and EU starting next year. This is due to the "rules of origin" requirement that mandates EVs traded across the English Channel to have 60% of their battery and 45% of their parts sourced from the EU or UK or face a 10% tariff. A senior Commission official, Richard Szostak, recently informed parliamentarians from the UK and EU that the bloc's battery investment has significantly declined, making the tariffs necessary to encourage domestic production. In 2022, the EU's share of global investment in battery production shrank from 41% to only 2% after the US offered substantial subsidies through its Inflation Reduction Act. Starting in 2024, car manufacturers in the UK will need to have 22% of their sales come from zero-emission vehicles, which means they may need to import EVs from the continent to meet this requirement. If EU carmakers ...
Post a Comment
Read more